Is VR a Bunch of BS? Consumer Adoption Rates Seem to Say So

On the back of recent news that Best Buy and Facebook are shutting down 40 percent of the Oculus demo stations at Best Buy locations around the country, the Wall Street Journal ran a report that highlights a rather bleak trend for the virtual reality market: High-powered VR headsets—like Oculus, or HTC’s Vive, or even Sony’s PlayStation VR—have been incredibly slow to catch on.

According to data from market research firm IDC, sited by WSJ, 2.2 million high-end headsets were sold last year generating around $1.4 billion, which was far below the firm’s projections and resulted in a nudged-down 2017 outlook to 6.4 million units and $3.2 billion in sales. Other research firms reported even worse shortfalls for VR. SuperData Research, who I spoke to last year about VR, expected 3.7 million units to be sold, but they reported that just 1.4 million were sold.

The reason for the shortfall is fairly obvious if you ask me. Consumer’s have been very unwilling to invest in a technology that is still so new, and still so niche.

The numbers from SuperData Research speak to that. The best-selling high-end VR headset last year was the PS VR, which hit around 745,000 units sold. HTC came in next with around 420,000 Vive headsets sold, while Facebook moved just 240,000 Oculus systems. That ranking goes, in order, from the least expensive VR headset (PS VR sells for $399) to the most expensive (the Oculus Rift retails for $600, but you need the Touch controls—an extra $200—to get the full effect).

But the thing is, those prices account for the headsets themselves. To run the PS VR, the user needs to own a PlayStation 4 system, so tack on an extra $350 for that. And if you have the Vive or Oculus? You’re looking at computer hardware that can run upwards of $1,000 or more just to support the programs needed to actually use the devices.

That is a MASSIVE investment for a product that plays immersive video games.

If that’s the kind of use you’re hoping to get out of a VR headset—which clearly there is a market for—then that’s great. These are products that will appeal to you; you’ll get your money’s worth out of them. But for there to be mass consumer adoption—like, at the level these research firms expected to happen this year—those prices are above and beyond where they need to be.

To be clear, this is just the high-end VR market that we’re talking about. Consumers are very happily scooping up simpler devices like the Samsung Gear VR (4.51 million units sold last year). The Gear and similar products—Google’s Daydream VR, and other Cardboard-esque devices—come in at a much, much lower price point, they still allow users to play games to an extent, and the content is arguably more immersive. Better yet, you don’t have to tether yourself to a PC or video game console in order to use the thing.